July 13, 2023 | 5 minute

Now or Never — Why 2023 is the Year to Budget for Digital Transformation or Lose the Race to the Future of Healthcare

scroll to top CEO Philipp von Gilsa and CRO Rom Eizenberg were recent guests in a wide-ranging conversation about challenges and opportunities in the healthcare industry. Here are some of the key takeaways from the discussion.

Healthcare executives are recognizing the need to embrace technology and digitize their operations. This urgency stems from the confluence of several factors that are putting pressure on the industry from different angles.

First, the volume of revenue across the industry has not fully recovered from the pre-pandemic levels. While it hasn’t fallen drastically, it also hasn’t reached its previous heights.

At the same time, costs, especially labor costs, have surged. On average, labor costs in the US healthcare industry have risen by approximately 20%. This increase can be attributed to factors such as the labor shortage and nursing crisis, a chronic shortage that continues to affect healthcare operators.

This means that many healthcare organizations are trapped in negative operating margins, a significant problem that is plaguing nearly half of the hospitals in the US. Even Trinity Health, a healthcare system with 88 hospitals, recently announced a massive loss of $300 million in the previous year. Given the major role of healthcare in the US economy, this is a problem that creates waves far beyond the source.

The rising costs of healthcare in the United States, coupled with the need to provide quality care, have created a sense of urgency for hospitals to find ways to eliminate waste and become more efficient in their operations.

To address these challenges, healthcare executives are turning to digital transformation as a solution. Digitization offers the potential to optimize both the quality of care and operational efficiency, thereby improving patient experience and reducing costs. However, it is essential to approach digital transformation strategically and not just as a collection of separate, unrelated initiatives.

The right approach to digital transformation

But simply committing to digital transformation of processes isn’t enough. A plan is needed to balance the different demands that need to be addressed.

To begin the digital transformation journey, it is crucial to take a step back before delving into specific use cases. Rather than starting with use cases, healthcare organizations should prioritize the identification and consolidation of relevant data throughout the patient journey. By centralizing this data, organizations can enable a multitude of use cases that improve care and enhance the patient experience.

Mapping, collecting, and centralizing data are essential prerequisites for driving digital transformation at scale.

Once the data has been mapped and a robust platform has been acquired, organizations can consolidate data from various sources within the organization. This allows for a deep understanding of how patients move through the care delivery process, interact with staff and medical devices, and engage with the clinical workflow from admission to release.

Many conversations within the industry revolve around two main approaches: cutting costs through technology implementation and improving the patient experience to combat declining revenues. However, these efforts are often disjointed, lacking a comprehensive strategy that connects operational efficiency with quality of care.

Balanced priorities

To successfully navigate the path toward digital transformation, healthcare executives should focus on optimizing two core areas of healthcare provision, the quality of care and operational efficiency. By achieving a balance between them, healthcare organizations can effectively address the challenges they face and become future-proof institutions that have embraced digital transformation.

Typically, health systems tend to gravitate toward one of these two functionalities, leading to a disjointed implementation of digital initiatives. Some organizations primarily focus on reducing costs and improving operational excellence by optimizing supply chains and reducing inventory. Others concentrate on enhancing the patient experience through mobile apps, digital front door solutions, and nurse safety initiatives. However, without a technology platform that can synchronize applications and digital services across these domains, imbalances occur, and the intended benefits are diminished.

There are other priorities to consider. It’s usually better to focus on three core workflows in any healthcare facility — medical device workflows, staff workflows, and patient workflows. By synchronizing these areas and considering the entire patient journey, healthcare organizations can achieve better outcomes.

One of the most impactful use cases, both in terms of immediate benefits and addressing nurse availability and experience, is optimizing medical device workflows. By ensuring efficient management and utilization of medical devices, hospitals can alleviate common bottlenecks and generate short-term positive outcomes.

Another crucial use case revolves around staff safety, which promotes buy-in from employees by emphasizing traceability and tagging systems.

Finally, tracking the patient’s journey and contextualizing care delivery by aligning resources like staff, medical devices, and clinical space can provide invaluable insights into identifying friction areas and eliminating bottlenecks.

Slow at first, but now all-in on digital transformation

Despite the clear value and benefits of digital transformation, the healthcare industry has been slow to adopt it at scale. Traditionally, healthcare organizations have heavily invested in clinical technology, while neglecting the operational side of care delivery.

Technology implementations in the operational domain have often been fragmented, limited to point solutions. Additionally, department heads have often deployed standalone software, further worsening the lack of synchronicity. But the emergence of patient-centric approaches and the convergence of operational efficiency and care delivery have created a newfound sense of urgency.

In conclusion, digitization plays a crucial role in improving the patient journey and transforming care delivery. By leveraging technology, optimizing workflows, and prioritizing patient experience and operational efficiency, healthcare organizations can achieve sustainable and future-proof healthcare systems. The time for digital transformation is now, and with the right strategies and tools, healthcare organizations can navigate this journey successfully.

Watch the webinar for more

For a deeper dive into this crucial topic in the modern healthcare landscape, watch the full webinar. You’ll get deeper insights into the factors involved in digital transformation, how it’s addressing the issues of the healthcare industry and more.